Let s get ready to rumble! Bryan Ashenden, BT Financial Group

Transcription

1 Let s get ready to rumble! Bryan Ashenden, BT Financial Group

2 From 1 July It s game on! FoFA Stronger Super

3 However, it s not a first round knock-out... FDS Best Interests APES 230 Limited License FoFA

4 How are you going to prepare for this fight? Training? SWOT analysis?

5 Round 1: Fee Disclosure Statements Client Obligation to issue rests with the fee recipient AR / CAR AFSL Platform Product Legn: Sec ASIC: RG 245

6 Get on the offensive

7 Watch out for the counter-attack

8 Get your combinations right

9 Round 1 scorecard Which clients will you issue an FDS to? What will you disclose in an FDS? When and how will you provide an FDS? What is your anniversary date? How do you change / reset dates? What happens when buying / selling a book of business?

10 Round 2: Best interests Client Obligation rests with the provider of the advice AR / CAR AFSL Platform Legn: Sec 961B ASIC: RG 175 Product

11 Do you lead with your right... Act in the best interests of retail clients when providing personal advice Give priority to the interests of the client where there is a conflict with planners interests, or those of one of their related parties Only provide appropriate advice Provide warnings where the advice is based on incomplete or inaccurate information. These obligations are imposed on the advice provider however civil penalties for breach are imposed on the providing entity (i.e. Licensee or Authorised Rep.)

12 ... or do you go on the defensive? The best interests duty can also be satisfied if the adviser can prove that they have done the following steps: Identified the objectives, financial situation and needs of the client; Identified: The subject matter of the advice that has been sought by the client (whether explicitly or implicitly); and The client s relevant circumstances Made reasonable inquiries to obtain complete and accurate information if required. Assessed whether the provider has the expertise required to provide the advice and, if not declined to provide the advice When recommending a financial product conducted a reasonable investigation into suitable financial products and assessed the information gathered. Based all judgements in advising the client on the client s relevant circumstances. Taken any other step that at the time the advice is provided, would reasonably be regarded as being in the best interests of the client, given the client s relevant circumstances.

13 Foot-work required to be in a better position Factors ASIC will consider include: The position the client would have been in if they did not follow the advice. The facts at the time the advice is provided. The subject matter of the advice sought by the client. The client s objectives, financial situation and needs. Where relevant, product features that the client values That the client receives a benefit that is more than trivial ASIC has acknowledged that placing a client in a better position does not necessarily mean their being financially better off. For example advice that either: Improves a client s understanding of their financial position; Aligns their financial position with their appetite for risk; Reassures them that they do not need to change their strategy or product holding as a result of a review ; or Increases their confidence to spend or donate their money will be regarded as placing the client in a better position

14 Round 2 scorecard Which approach will you take? Broad or narrow? How will you demonstrate compliance? Changes to documentation?

15 Round 3: Conflicted remuneration Client AR / CAR Conflicted remuneration is essentially any benefit that has the ability to influence the advice AFSL Platform Legn: Sec ASIC: RG 246 Product

16 Round 3 scorecard Volume related v non-volume related benefits Geared investment considerations What happens with margin loans? Employee arrangements Grandfathering

17 Round 4: Opt-in (take a breather) Client Obligation to issue rests with the fee recipient AR / CAR AFSL Platform Legn: Sec ASIC: RG 183 Product

18 Round 5: APES 230 New finalised standard Effective July 2014 Remuneration impacts from July 2015 Best interests obligations A requirement under FoFA and APES 230 How does it impact your SMSF recommendations? New SMSFs v existing SMSFs Conflicted remuneration FoFA v APES 230 Fee disclosure requirements FoFA v APES 230

19 Round 6: Limited Licensing regime What does it cover? Who will use it? What can you do? What does it mean for your business?

20 Round 7: Accountant s exemption Remains until 30 June 2016

21 Round 8: SMSFs New limited licensing regime APES 230 Removal of Accountant's exemption Future of Financial Advice Regulator intervention

22 Round 9: Tax Agents Services Act Draft Bill only Notification v registration Education requirements

23 Round 10: MySuper New investment option Not necessarily a new fund Impacts on your clients? Don t forget about increased SG from 1 July 2013 Potential opportunities

24 Round 11: Federal Budget Changes already announced Concessional contribution limits Refund of excess contributions Taxation within pension accounts Other possibilities?

25 Round 12: Federal election Not quite the knock-out blow you are possibly hoping for...

26 Post-fight analysis For many, it will be a points decision You can make it a decisive victory Identify your weaknesses and address them Identify your competition s weaknesses and exploit them Be prepared to go the distance

27 Timetable for change FOFA FDS requirements FOFA conflicted rem FOFA best interests APES 230 remuneration FOFA opt-in TASA reregistration Federal Budget July 2013 July 2014 July 2015 July 2016 Federal election APES 230 best interests TASA notification TASA registration Limited AFSL Accountant s exemption ceases MySuper commences Enhanced education requirements MySuper rollovers